Spain’s sovereign credit rating was cut for the second time this year by Standard & Poor’s on concern that the country will have to provide further fiscal support to banks as the economy contracts.
S&P lowered Spain to BBB+ from A, with a negative outlook. Spain’s short-term rating was reduced to A-2 from A-1, New York- based S&P said in a statement yesterday. The yield on Spain’s 10-year bond rose 16 basis points to 5.99 percent.
Yields on 10-year Spanish bonds surpassed 6 percent on seven trading days this month, boosting concern that borrowing costs may reach levels that prompted bailouts for Greece, Ireland and Portugal. The rate was 5.83 percent.